EDUCATIONAL POST (FVG - Fair Value Gap)

EDUCATIONAL POST: (FVG - Fair value Gap) 📊📈

Let's take some time to explain a trading term I often use in my TA. 🤓

FVG - or Fair Value Gap (= inefficiency, void...)

👉 What they mean by that is an area of the chart where the price moved past in just 1 single candle, meaning the candle before + after haven't touched this area.
👉 This is how such a gap is formed.
👉 This gap frequently works as a magnet for the future price, indicating a CONTINUATION (bullish —> bounce, bearish —> drop)

NOTE: this is the strongest on the first touch it does, after that it's power deminishes and price often moves back through it.

EXAMPLE: (bullish) price moves up fast and creates a FVG. This area will act as a bounce area for when the price drops back down to this, before continuing higher. I've added a theoretical + BTC example. (scroll back to see it on the chart)

Hope you learned something. 👌

Oli 🤙